Home equity insurance: A pilot project
Abstract
Home equity is the single largest component of household wealth for the majority of American households. Yet, there is virtually no way for the average family to insure itself against drops in home value and the ensuing destructive financial loss. We document the development and implementation of a home equity insurance program launched in 2002 in Syracuse, New York. One factor that limits these programs is that house price changes have a large idiosyncratic component.